How To Buy Monero (XMR) | Beginners Guide

Monero or XMR, introduced in 2014, is another cryptocurrency that is making its mark in the digital currency world. However, what makes Monero radically different is how it has made digital currency even more private and secure. When you buy Monero or sell it online, the entire process is entirely in your hands. Further, Monero makes use of ring signatures and ring confidential transactions, and that keep your addresses and transaction amount safe from any third-parties. Due to its inherent characteristics, buying Monero is altogether untraceable.

With so many online exchanges available today supporting different cryptocurrencies and each having their own method of working, it is difficult to understand where to buy Monero securely and inversely, how to sell it at the best price. If you want these and other questions answered, you have to come to the right place.

This article will help you in understanding the workings of where to buy Monero, how to exchange it for other currencies, and so much more:

What is Monero?

How to choose a Monero Wallet that’s right for you?

Steps on how to get the official Monero Wallet

Steps on how to buy another cryptocurrency to exchange it for Monero.

Steps on how to exchange it for Monero.

Steps on how to transfer Monero from the exchange into your own wallet.

WHAT IS MONERO?

Like Bitcoin and Ethereum before it, Monero (XMR) is a cryptocurrency or an encrypted digital currency working on the principle of the blockchain. It uses a peer-to-peer consensus network to verify transactions making it immune to interference by any regulatory authorities such as governments or financial institutions.

Monero was created in 2014 as a fork of Bytecoin to rectify inherent flaws in the algorithms used by other cryptocurrencies and provide other additional features.

So what makes Monero better than other cryptocurrencies and why should you invest in it?

Secure:

Like Bitcoin, Monero is secure in that each transaction is confirmed and verified by a network of peers. There is no way that a third party would be able to access or change the data. However, Monero has the added advantage that each transaction is secure cryptographically.

Private:

Bitcoin which functions on the basis of a transparent ledger which means that Monero uses ring signatures, stealth addresses and ring confidential transactions, so that origins, amounts, and senders of all transactions are unintelligible or obfuscated to any third party.

Fungible:

Since all past and present transactions are available for public access, some bitcoins may be blacklisted because of the transactions they were involved in. This cannot take place with Monero since all transactions are private by default.

Unlinkable and Untraceable:

Any Monero coins sent are rerouted using a randomly generated address which is valid only for that particular transaction. These addresses created are not kept on record, and so it is virtually impossible to track an individual or address based on past or present transaction. This is not the case with Bitcoin and other cryptocurrencies.

HOW TO CHOOSE THE BEST MONERO WALLET

Before you can start making Monero transactions, you need first to have a wallet to secure Monero funds. A cryptocurrency wallet is a unique software that can be used to store public and private keys. It is used to interact with other users on the blockchain to send and receive currency as well as monitor transactions.

To decide on a Monero wallet, you should consider the following criteria:

XMR Support: Since Monero is a relatively new cryptocurrency, there aren’t that many digital wallets optimized to deal with it. Make sure any wallet you choose can handle Monero.

Hot Wallets vs. Cold Wallets: Simply put, a hot wallet is one which is connected to the internet, and a cold wallet is one which is not connected to the internet. Admittedly, this means that a hot wallet is more susceptible to attack and theft.

Mobile Wallets: These are the Android and iOS applications that can be used to make Monero transactions. The advantage with these kinds of wallets is that you can access your funds on the go, use QR codes to access the wallets and they have additional security features. However, your phone will remain open to viruses and malware.

Examples of mobile wallets for Monero are the Monerujo wallet for Android and CakeWallet for iOS.

Web Wallets: These are the cryptocurrency wallets that can be accessed via web browsers. It is generally advised not to store all your cryptocurrency in online wallets because they are extremely vulnerable to an online attack such as malware, viruses, and keyloggers. Moreover, your wallet is in complete control of a third party and is essentially, out of your own hands.

Desktop Wallets: A desktop wallet is an example of a cold wallet that provides much better security compared to other wallets. This is because it is set up on a desktop or laptop and cannot be hacked over the internet provided you don’t connect to the internet.

Hardware Wallets: A hardware wallet is the safest option to store your public and private keys as well as carry out transactions. A hardware device like a USB is plugged into a computer connected to the internet, enter a pin and then use the wallet as required.

Two popular hardware wallet companies Ledger and Trezor are working on an integration with Monero to set up a hardware wallet.

Paper Wallet: Paper wallets are the best way to keep your passwords safe. A paper wallet could refer to a written copy or print out of public and private keys. You could also print out a QR code of your keys on a piece of paper. Since the only person with access to a paper wallet is yourself, it is a safe way to keep your passwords. For increased security, make sure the computer is not connected to the internet when the keys are being generated and also check for any malware.

Cost: Most online wallets are free but may charge a small transaction fee for receiving and sending funds on the internet. Hardware wallets are expensive and can cost up to $99 since they provide increased security compared to software wallets.

Single Currency vs. Multi Currency: Whether you use a single currency or multi currency wallet is totally up to you. If you are regularly trading in different cryptocurrencies, you should pick a wallet that can work with different cryptocurrencies.

STEPS TO INSTALL THE OFFICIAL MONERO WALLET

Until recently, Monero did not have its own official GUI (Graphic User Interface) Wallet. You had to rely on third-party wallets for monitoring any Monero transactions. However, this has changed with the introduction of the official Monero wallet. It is a desktop wallet that can be set up on many different operating systems such as Windows, Mac OS, Linux, etc.

Choose the operating system you are working with and start the download.

This will download the compressed .zip file from which you have to extract the contents.

Click on the “monero-wallet-gui” to start the Monero GUI wallet.

Note: If your firewall blocks the wallet, then you need to click on Allow button so that the Monero wallet can be run.

This will open the installation window.

Select your preferred language to continue.

Select “create a new wallet” to begin.

Important:You will now be shown a 25-word mnemonic seed. This is a special sequence of characters and numbers that will allow you to recover your Monero account on any other computer. You should ideally save the seed in a text file or on paper.

After clicking next, you will be asked to set a password for your account. This needs to be strong to protect your account.

Finally, click on “Use Monero” to start using it.

This will initiate the “Monero Daemon” or the program that lets you start downloading the blockchain.

Note: If this doesn’t happen automatically, you can initiate the daemon by clicking on the Monerod file in the same folder.

You then need to let the blockchain get downloaded, which is an automatic process.

You can click on Receive to get an address (a string of characters and numbers) which will be used to receive funds in the wallet.

STEPS TO BUY OTHER CRYPTOCURRENCY AND EXCHANGE IT FOR MONERO

Once you have set up a Monero wallet, you now need to purchase some other cryptocurrency so that you can exchange it for Monero. We will take a look at how you can buy other cryptocurrencies such as Bitcoin, Ether, Litecoin.

To purchase a cryptocurrency, you need to use an exchange that can be used to purchase cryptocurrency using fiat currency. You then need to use another online exchange to trade it for Monero. Two exchanges to buy Bitcoin using fiat currency are:

Coinbase

Coinmama

Here, we have given you the steps to :

Buy Bitcoin and Ethereum using the Coinbase and Coinmama respectively. (The same steps can be used for buying other currencies.)

How to buy and exchange Bitcoin using Coinbase and Binance:

Coinbase is one of the most efficient exchanges that can be used to purchase different digital currencies such as Bitcoin, Litecoin, and Ethereum. To start buying crypto, you need a Visa or Mastercard debit or credit card and a valid photo ID. You can use a transfer using a bank account, but that is a much slower and hence less preferred method.

Here are the steps to purchase Bitcoin using Fiat Currency on Coinbase:

Go to the Coinbase website and click on “Sign Up” to create your account.

To create an account, enter your personal details such as your name and email address. You need to verify your email address by logging in to your email.

Once your account is verified, you can log in to your Coinbase account.

This will take you to your dashboard on your Coinbase account.

You should finish creating your profile in the Settings tab and enable two-factor authentication for increased security.

You can also decide on a URL which will be how your profile will be seen in the world.

Visit the Payment Methods page and select Add Payment Method.

You can choose debit/credit card on the Payments Method Selector.

Add the card information and a billing address.

Your card will then be added with a message saying Debit/Credit Card Added displayed.

Click on Buy/Sell in the top left corner to start purchasing Bitcoin.

Note: Before buying and selling Bitcoin, you will need to verify your identity using a government-issued photo ID.

You then need to specify the amount of bitcoin you want to buy in dollars, and you will be shown the equivalent amount in BTC.

Note: You will have to pay a 3.8% transaction fee when buying bitcoin.

How to buy and exchange Ethereum using Coinmama and Binance:

Coinmama is an Israel based exchange that can be used to purchase Bitcoin using fiat currencies. To start buying Crypto, you need a Visa or Mastercard debit or credit card and a valid photo ID. You can use a transfer using a bank account, but that is a much slower and hence less preferred method. Unlike Coinbase, you cannot store your cryptocurrency on Coinmama. You have to transfer it to another wallet, Binance in this case. To use Coinmama, you need a debit/credit card as well as government-approved photo ID.

Here are the steps to purchase Ethereum using Fiat Currency on Coinmama:

Go to the Coinmama website and click on Sign Up to create your account.

To create an account, enter your personal details such as your first and last name and email address. You also need to choose a strong password.

Select your country and click on Register after agreeing to the terms and conditions.

You need to verify your email address by logging in to your email.

Once your account is verified, you can log in to your Coinmama account.

Click on Verify Your Account in the left-hand menu. Click Next after entering your personal details.

You will be asked to upload photographs of your documents. Follow the instructions as seen on the screen.

Your verification can take some time.

Here are the steps to exchange your Ethereum for Monero using Binance:

SELLING MONERO FROM YOUR WALLET

To sell your Monero, you need to perform the same tasks in the reverse order, i.e., convert your cryptocurrency to fiat currency using an exchange. In this case, we have considered the option of transferring XMR from the wallet to Binance, converting it into Bitcoin and then transferring it to Coinbase to be sold. The order of the tasks is summarised below:

To send money from Monero wallet to Binance,

Go to the Send tab on the Monero wallet.

You have to fill multiple fields :

Amount: Amount of XMR you want to send.

Transaction Priority: How fast you want the transaction to be carried out. You will have to pay more if you want the transaction to be carried out faster.

Address: The address of the person you want to send the XMR to. This will be the deposit address you have obtained from Binance.

Payment ID: This is used to identify incoming transactions with user accounts for added privacy. It is an optional field.

Description: You can add an optional description of the transaction.

Finally, click on send to transfer the amount across the network.

Upon receiving XMR funds in Binance, you need to convert them into BTC,

Once it shows up in the Available Balance, you can start trading it for Bitcoin.

WHY YOU SHOULD NEVER LEAVE YOUR MONERO IN A WEB WALLET OR EXCHANGE

It is common knowledge that you should never leave your Monero on any resource that is connected to the internet.

Why you shouldn’t leave your money on an exchange or web wallet,

Hacking: Hacking is the major weakness with online crypto exchanges and web wallets. There have been many incidents of these being hacked and a lot of innocent investors losing their savings. A recent example of this was the Poloniex exchange which has since become unusable.

Security/Privacy: When you use an exchange or web wallets to carry out transactions, there is a good chance of your security being compromised. The longer you use it, the more likely it is that your private keys and in turn your funds are jeopardized.

Third Party Control: The entire purpose of digital currency is defeated when you use an online exchange or web wallet to store your cryptocurrency. This is fundamentally passing the control of your funds to a third party instead of keeping it with yourself.

Bankruptcy: Most exchanges are small companies and do not have a strict management structure. Neither are they insured by any government or private agencies. Therefore, you would lose all your money if an online exchange declares bankruptcy.

The safest means of protecting your crypto is to transfer it from an exchange after every transaction into a cold wallet.

CONCLUSION

Monero is fast becoming a rational alternative to traditional payment methods which can be used to make sensitive transactions privately and securely. With its seemingly ideal features and working, Monero is definitely in the lead to give the market leader, Bitcoin, some stiff competition.

However, you must exercise caution whenever you are thinking of investing in crypto. Sound judgment and a thorough understanding of the digital currency market are quintessential in making profitable trades.